Alberta’s weighted average Power Pool price for July is currently $153.68/MWh. Relative to last week’s price of $132.01/MWh, this is an increase of $21.67/MWh or 16.4%. One of the primary driving factors of the elevation in pricing was the AESO issuing a Level 2 Energy Emergency Alert (EEA) yesterday, the second time this month. EEAs are issued when demand levels begin to climb and the AESO must run on expensive reserves to meet the increased provincial requirements. These events come on the heels of another heat wave affecting parts of the province. While the heat warning is not expected to be as intense or long lasting as the previous ones, this is the third warning issued this month. We can expect to see elevated levels of demand, as Albertans aim to ward off the heat until Friday when showers are expected to roll through the province.
The weighted average Hourly Ontario Energy Price (HOEP) is at 2.7¢/kWh for the month of July, an increase of about 12% or 0.3¢/kWh compared to last week’s settle. Although demand and supply have both decreased about 1% compared to average July levels (15,303MW and 16,149MW), the spread is tighter than what we’ve observed in the last few months and compared to average year-ago levels. The narrower buffer between demand and supply has put upward pressures on HOEP. Most generation sources have either lowered or maintained their supply: nuclear (-1%, 10,321MW), gas (unchanged, 1,379MW), wind (-20%, 892MW), solar (-14%, 99MW), and biofuel (-2%, 45MW). The only exception is hydro, which has slightly increased its supply (+1%, 3,644MW). With the first Global Adjustment estimated at 7.2¢/kWh and the first estimate recovery rate at 0.5¢/kWh, July’s total market price is 10.4¢/kWh.
– Mark Ljuckanov, Energy Advisor / Ryan Cosgrove, Energy Data Analyst / Sarah Clemente, Energy Data Analyst
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